Understanding Business Chapter 8

Line managers are those who have the authority to:

-Issue orders -Enforce discipline -adjust to changing conditions

The Four Ways to Structure an Organization

1. Line organizations 2. Line-and-staff organization 3. Matrix-style organizations 4. Cross-functional self-managed teams.

Hierarchy

A system in which one person is at the top of an organization and there is a ranked or sequential ordering from the top down of managers who are responsible to that person.

Virtual Corporation

A temporary networked organization made up of replaceable firms that join and leave as needed.

Inverted Organization

An organization that has contact people at the top of the CEO at the bottom of the organizational chart

Formal Organization

Details lines of responsibility, authority, and position.

Staff Personnel

Employees who advise and assist line personnel in meeting their goals, and include marketing research, legal advising, and human resource management.

What was Fayol's basic principles?

Fayol introduced principals such as unity of command, hierarchy of authority, division of labor; subordination of individual interests to the general interest, authority, clear communication channels, order, and equity.

There are no specialists, legal, accounting, human resources, or information technology departments in what organization?

Line Organization

______ ________ issue orders, enforce discipline and adjust the organization to change.

Line managers

______ ______ have authority to make policy decisions

Line personnel

____________ __________ emphasize on product development, creativity, special projects, communication, and teamwork.

Matrix Organizations

What are the key alternatives to the major organizational models?

Matrix organizations assign people to projects temporarily and encourage interorganizational cooperation and teamwork. Cross-functional self-managed teams have all the benefits of the matrix style and are long term.

What is organizational culture?

ORGANIZATIONAL (OR CORPORATE) CULTURE consists of the widely shared valueswithin an organization that foster unity and cooperation to achieve common goals.

Chain of the Command

The line of authority that moves from the top of the hierarchy to the lowest level.

Span of Control

The optimal number of subordinates a manager supervises or should supervise or should supervise.

Real Time

The present moment or actual time in which something takes place.

Informal Organization

The system that develops spontaneously as employees meet and form cliques, relationships, and lines id authority outside the formail organization.

What is happening today to American business?

They are adjusting to changing markets. That is a normal function in a capitalist economy. There will be big winners, like Google and Facebook, and big losers as well. The key to success is remaining flexible and adapting to the changing times.

Core Competencies

Those functions that the organization can do as well as or better than any other organization in the world.

When work is standardized, broad spans of control are possible

True

What are the two major organizational models?

Two traditional forms of organizations are (1) line organizations and (2) line-and-staff organizations. A line organization has clearly defined responsibility and authority, is easyto understand, and provides each worker with only one supervisor. The expert advice of staff assistants in a line-and-staff organization helps iin areas such as safety, quality control, computer technology, human resource management, and investing.

Networking

Using communications technology to link organizations and allow them to work together.

What principles did Weber add?

Weber added principles of bureaucracy such as job descriptions, written rules and decision guidelines, consistent procedures, and staffing and promotions based on qualifications.

Line Personnel

Workers responsible for directly achieving organizational goals, and include production, distribution people, and marketing personnel.

Line personnel have the authority to issue orders and discipline employees, while staff personnel have the ability to ____ and influence.

advise

Tall Organization Structures

an organizational structure in which the pyramidal organization chart would be tall because of the various levels of management.

Managing _____ has become a critical managerial function because the increasing rate of change affects all organizations.

change

Macy's is a company that allows its manager in California to select different items for sale then those in Maine because it has a(n) ________ structure.

decentralized

Firms may use a combination of departmentalization techniques to create a ____ form.

hybrid

The type of organization that has direct two-way lines of responsibility, authority, and communication from the top down, with everyone reporting to one supervisor is called a:

line organization

A way to fix the problem of ______-style teams is to establish long-term teams.

matrix

A temporarily networked organization made up of replaceable firms that join and leave as needed is called a(n) __________ organization.

virtual

Centralized Authority

when decision making is concentrated at the top level of management.

Matrix Organization

Specialists from different parts of the organization work together temporarily on specific projects, but still remain part of a line-and-staff structure.

Employees who advise and assist line manager in meeting their goals are called _______ personnel.

Staff

Organization Chart

A visual device that shows relationships among people and divides the organization's work; it shows who report to whom.

What are the major concepts involved in interim communications?

Networking uses communications technology and other means to link organizations and allow them to work together on common objectives. A virtual corporation is a networked organnization of replaceable firms that join and leaveas needed. Benchmarking tells firms how their performancemeasures up to that of their competitors in specific functions. The company may then OUTSOURCE to companies that perform its weaker functions more effectively and efficiently. The functions that are left are the firm's CORE COMPETENCIES.

Organizational (or Corporate) Culture

Widely shared values within an organization that provide unity and cooperation to achieve common goals.

Benchmarking

Compares an organizations practices, processes, and products against the world's best.

Restructuring

Redesigning an organization so it can more effectively and efficiently serve its customers.

Decentralized Authority

When the decision making is delegated to lower-level managers and employees more familiar with local conditions than headquarters management could be.

Group of employees from different departments who work together on a long-term basis are called:

cross-functional teams

An organization structure in which decision-making authority is maintained at the top level of management is called a(n) __________ organization.

Centralized

What are the four major choices in structuring organizations?

Choices to make in structuring and restructuring organizations cover (1) centralization verses decentralization, (2) breadth of span of control, (3) tall versus flat organization structures, and (4) type of departmentalization.

What are the latest trends in structuring?

Departments replaced or supplemented by by matrix organizations and cross-functional teams that decentralize authority. The span of control becomes larger as employees become self-directed. Another trend is to eliminate managers and flatten organizations.

Line Organization

Has direct two-way lines of responsibility, authority and communication running from the top to the bottom. Everyone reports to one supervisor.

Transparency

When a company is so open to other companies that electronic information is shared as is the companies were one.

Economics of scale

Companies can reduce their production costs by purchasing raw materials in bulk; the average cost of goods goes down as production levels increase.

Cross-Functional Self-Managed Teams

Groups of employees from different departments who work together on a long-term basis (as opposed to the temporary teams established in matrix-style organizations).

What are the principles of organization management?

Structuring an organization means devising a division of labor (sometimes resulting in specialization), setting up teams or departments, and assigning responsibility and authority. It includes allocating resources (such as funds), assigning specific tasks, and establishing procedures for accomplishing the organizational objectives. Managers also have to make ethical decisions about how to treat workers.

What is the difference between the formal and informal organization of a firm?

The FORMAL organization details lines of responsibility, authority, and position. It's the structure shown on organization charts. The INFORMAL organization is the system that develops spontaneously as employees meet and form cliques, relationships, and lines of authority outside the formal organization. It's human side of the organization. The informal organization is an invaluable managerial asset that often promotes harmony among workers and establishes the corporate culture. as effective as the informal organization may be in creating group cooperation, it can still be equally powerful in resisting management directives.

Departmentalization

Divides organizations into separate units

What is an inverted organization?

An INVERTED ORGANIZATION places employees at the top of the hierarchy; managers are at the bottom to train and assist employees.

Bureaucracy

An organization with many layers of managers who set rules and regulations and oversee all decisions.

Flat Organization Structures

An organizational structure that has few layers of management and a broad span of control.